Federal Court of Australia

Millsom v North Melbourne College Aus Pty Ltd [2023] FCA 677

ORDERS

THE COURT ORDERS THAT:

1.    The respondent’s interlocutory application dated 23 August 2022 be dismissed.

2.    There be no order as to costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

HESPE J:

Introduction

1    By his amended originating application dated 18 July 2022, the applicant seeks declarations, compensation and pecuniary penalties against the respondent pursuant to the Fair Work Act 2009 (Cth).

2    On 30 August 2022, the respondent filed an interlocutory application seeking summary dismissal of the proceeding pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and/or r 26.01 of the Federal Court Rules 2011 (Cth) on the basis that the applicant has no reasonable prospect of successfully obtaining the relief sought and/or the proceeding is an abuse of process of the Court. Among other things, the respondent contends that the applicant is seeking to re-litigate issues that were or ought to have been the subject of earlier proceedings in the Federal Circuit Court (as it then was) in which the Federal Circuit Court made final orders by consent and in circumstances where the parties had executed a deed of release.

3    For the reasons that follow, I have concluded that the respondent’s interlocutory application should be dismissed.

Overview of the proceedings

4    The applicant’s amended originating application to this Court relates to an alleged failure by the respondent to make superannuation contributions for the benefit of the applicant in the manner required by cl 20.2 of the Educational Services (Post-Secondary Education) Award 2010. The applicant claims that, by failing to make superannuation contributions in accordance with the terms of that Award, the respondent breached cl 20.2 of the Award and thereby contravened s 45 of the Fair Work Act.

5    By his amended statement of claim, the applicant claims that the failure to make those superannuation contributions by the time required by the Award deprived the applicant of the benefit of membership of a group life policy and a group income protection policy issued to the trustee of AustralianSuper and by reason of the applicant’s disablement, the applicant would have been entitled to the benefit of a total and permanent disability insurance payment. The applicant therefore lost the opportunity to make an insurance claim.

6    The applicant seeks relief in the form of declarations to the effect that the respondent breached s 45 of the Fair Work Act by failing to make superannuation contributions within the time required by the Award, and orders requiring the respondent to pay compensation and a pecuniary penalty to the applicant pursuant to s 546(3) of the Fair Work Act.

7    Although not a common law cause of action, the applicant’s claim in the form of his application for a statutory remedy based on a breach of s 45 of the Fair Work Act is referred to as a cause of action for the purposes of these reasons.

The interlocutory application

8    In support of its interlocutory application for summary dismissal, the respondent relies upon an affidavit of Mr Rajiv Dalal, solicitor for the respondent dated 24 August 2022 and on written submissions dated 17 November 2022 and 2 March 2023, as well as oral submissions made at a hearing on 23 May 2023.

9    The applicant relies upon two affidavits of Ms Aphroditi Bakopanos, dated 14 October 2022 and 2 December 2022, and an affidavit of Mr Matthew Andrews dated 22 May 2023 in opposition to the interlocutory application. The applicant also relies on written submissions dated 2 December 2022 and on oral submissions made at a hearing on 23 May 2023.

Applicable principles

Summary judgment

10    Section 31A of the Federal Court Act provides in part:

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)     the first party is defending the proceeding or that part of the proceeding; and

(b)     the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)     hopeless; or

(b)     bound to fail;

for it to have no reasonable prospect of success.

(4)     This section does not limit any powers that the Court has apart from this section.

11    Rule 26.01 of the Federal Court Rules provides in part:

(1)     A party may apply to the Court for an order that judgment be given against another party because:

(a)     the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

(b)     the proceeding is frivolous or vexatious; or

(c)     no reasonable cause of action is disclosed; or

(d)     the proceeding is an abuse of the process of the Court[.]

…

(4)     If an order is made under subrule (1) dismissing part of the proceeding, the proceeding may be continued for that part of the proceeding not disposed of by the order.

12    In Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118, Hayne, Crennan, Kiefel and Bell JJ stated at 139 [53]:

[Section] 31A departs radically from the basis upon which earlier forms of provision permitting the entry of summary judgment have been understood and administered. Those earlier provisions were understood as requiring formation of a certain and concluded determination that a proceeding would necessarily fail. That this was the basis of earlier decisions may be illustrated by reference to two decisions of this Court often cited in connection with questions of summary judgment: Dey v Victorian Railways Commissioners and General Steel Industries Inc v Commissioner for Railways (NSW).

(Footnotes omitted.)

13    Their Honours continued at 140 [56] and 141 [60]:

56    Because s 31A(3) provides that certainty of failure (“hopeless” or “bound to fail”) need not be demonstrated in order to show that a plaintiff has no reasonable prospect of prosecuting an action, it is evident that s 31A is to be understood as requiring a different inquiry from that which had to be made under earlier procedural regimes. It follows, of course, that it is dangerous to seek to elucidate the meaning of the statutory expression “no reasonable prospect of successfully prosecuting the proceeding” by reference to what is said in those earlier cases.

…

60    Rather, full weight must be given to the expression as a whole. The Federal Court may exercise power under s 31A if, and only if, satisfied that there is “no reasonable prospect” of success. Of course, it may readily be accepted that the power to dismiss an action summarily is not to be exercised lightly. But the elucidation of what amounts to “no reasonable prospect” can best proceed in the same way as content has been given, through a succession of decided cases, to other generally expressed statutory phrases, such as the phrase “just and equitable” when it is used to identify a ground for winding up a company. At this point in the development of the understanding of the expression and its application, it is sufficient, but important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes.

(Footnotes omitted.)

14    See also Spencer at 131 [24] (French CJ and Gummow J) and Trkulja v Google LLC [2018] HCA 25; (2018) 263 CLR 149 at 157–8 [22] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

Abuse of process

15    In Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507, French CJ, Bell, Gageler and Keane JJ stated at 518–9 [25] that “abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute”.

16    In Victoria International Container Terminal Ltd v Lunt [2021] HCA 11; (2021) 271 CLR 132, Kiefel CJ, Gageler, Keane and Gordon JJ (with whom Edelman J agreed at 147 [36]) stated at 141 [18]:

The fundamental responsibility of a court is to do justice between the parties to the matters that come before it. In the performance of that function, the doing of justice may require the court to protect the due administration of justice by protecting itself from abuse of its processes. The power to stay, or summarily dismiss, proceedings because one party has abused the processes of the court is concerned to prevent injustice, and that power is properly exercised where the conduct of the moving party is such that the abuse of process on its part may prevent or stultify the fair and just determination of a matter.

(Footnotes omitted.)

Consideration

17    The respondent contends that the applicant’s originating application has no reasonable prospect of success because his claim is precluded by the doctrines of res judicata, issue estoppel or Anshun estoppel, or by reason of the execution by the applicant of a deed of release. Alternatively, even if the applicant’s case is not technically caught by these doctrines, it ought to be dismissed or stayed on the ground that it is “unjustifiably vexatious and oppressive” for the applicant to litigate anew a case which has already been disposed of by earlier proceedings.

18    For the purposes of this interlocutory application, the respondent was content for the Court to proceed on the basis that from about 26 May 2014 to at least 25 January 2017, he was employed by the respondent. Due to suffering a Chronic Adjustment Disorder, the applicant was unable to work and, by reason of his illness, he ceased working for the respondent on 25 January 2017. At that time, the applicant was a member of an AustralianSuper superannuation fund.

The earlier proceedings

19    On 12 October 2017, the applicant commenced proceedings in the Federal Circuit Court, claiming damages, compensation under s 545(2)(b) of the Fair Work Act and a pecuniary penalty under s 546 of the Fair Work Act.

20    Part of the applicant’s claim was that it was a term of his employment agreement with the respondent that the applicant was entitled to superannuation contributions equal to 9.5% of his base salary, the respondent had failed to pay those contributions and that failure constituted a breach of a term of his contract with the respondent. The applicant claimed loss and damage for the unpaid superannuation amounts in the amount of $17,535.76 to 30 June 2017.

21    In the alternative, the applicant claimed relevantly that the failure to pay superannuation constituted a breach of s 323(1)(a) of the Fair Work Act and, by reason of such a breach, the applicant suffered loss or damage in a sum which included the unpaid superannuation contributions.

22    In written submissions dated 12 July 2018 filed in the Federal Circuit Court proceedings, the applicant submitted (at [38]–[39]) that a term requiring the respondent to pay superannuation was:

to be implied by the operation of the Higher Education Industry—General Staff—Award 2010 (Award), specifically clause 20, and the fact that the Applicant’s employment was covered by the Award.

Further and in the alternative, should the Court find that the Applicant is covered by some other award, all modern awards contain a superannuation provision and it should therefore be implied irrespective of which modern award covers the Applicant’s employment.

23    In written submissions dated 17 July 2018 filed in the Federal Circuit Court proceedings, the respondent conceded that it was required to pay superannuation at the rate of the Superannuation Guarantee Charge for the period that the applicant was employed. The rate was to be determined by reference to “salary being $60,000 for the first three months of his employment and $72,000 per annum from that date to the termination of his employment” (at [6]). The respondent conceded that it had not made all the necessary payments to the superannuation fund.

24    On 19 July 2018, the respondent made nine superannuation contributions to the applicant’s superannuation account with AustralianSuper in amounts totalling just over $18,700.

25    In an amended defence dated 8 August 2018, the respondent denied failing to pay superannuation.

26    On 12 September 2018, the applicant and respondent (amongst others) executed a deed of release.

27    The recitals provided:

A.    The [Applicant] was employed by the [First Respondent] from 26 May 2014 until on or about 10 February 2017 (the Employment).

B.    The Applicant commenced proceedings against the Respondents in the Federal Circuit Court seeking compensation under the Fair Work Act, employment entitlements and penalties (the Proceedings).

C.    The Respondents deny liability in respect of the Proceedings.

D.    As a result of negotiations, the parties have agreed on the terms set out herein (the Agreement).

28    Relevantly, clause 1 provided:

1.1    The Applicant agrees to resolve the proceedings for a payment of $65,000 (Payment). The First Respondent, Third Respondent and the Fourth Respondent are each jointly and severably [sic] liable for the Payment.

1.2    The Payment is to be characterised as:

(a)    $30,000 as to costs (McDonald Murholme to provide a tax invoice for this amount within 7 days); and

(b)    $35,000 damages in lieu of penalties.

…

1.4    The parties agree to seek consent orders to the effect of: Dismissing the Application with no Order as to costs.

29    Clause 2 relevantly provided:

The Applicant:

(a)    releases and forever discharges the Respondents from all present and past claims (including but not limited to all claims in contract, tort, at common law or under statute) which the Applicant have [sic] or may have had against the Respondents arising out of or related to the Employment and the Proceeding other than claims relating to the Workplace Injury Rehabilitation and Compensation Act 2013 or the Superannuation Guarantee (Administration) Act 1992;

30    On 12 September 2018, the Federal Circuit Court made orders by consent dismissing the application.

Res judicata

31    The respondent contends that the applicant’s claims are precluded by the doctrine of res judicata. The respondent submitted that in the present proceedings the applicant is as a matter of substance merely seeking a different remedy (damages based on loss of opportunity to receive a total and permanent disablement insurance payment) for the same cause of action, being failure to pay superannuation.

32    The respondent’s submission conflates two doctrines — res judicata and cause of action or claims estoppel.

33    Res judicata operates where the existence of the very “cause of action” raised in later proceedings has already been determined as between the same parties in earlier proceedings for a remedy based on it, and that determination has not been set aside: Bryant v Australia and New Zealand Banking Group Ltd (No 3) [1995] FCA 1552 (Lindgren J). The right claimed is thereby merged in the earlier judgment and no longer affords an independent existence. As the plurality explained in Tomlinson at 516 [20] (French CJ, Bell, Gageler and Keane JJ):

An exercise of judicial power, it has been held, involves “as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons”. The rendering of a final judgment in that way “quells” the controversy between those persons. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they “merge” in that final judgment. That merger has long been treated in Australia as equating to “res judicata” in the strict sense.

(Footnotes omitted.)

34    The first necessary element of res judicata is that there be a final decision of a judicial tribunal. The fact that that order was made by consent and without any findings following a hearing on the merits does not prevent the doctrine from operating: Hoysted v Federal Commissioner of Taxation [1926] AC 155; (1925) 37 CLR 290; Kinch v Walcott [1929] AC 482; Chamberlain v Deputy Commissioner of Taxation [1988] HCA 21; (1988) 164 CLR 502 at 508 (Deane, Toohey and Gaudron JJ); Bryant at [53] (Lindgren J); Zetta Jet Pte Ltd v The Ship “Dragon Pearl” (No 2) [2018] FCAFC 132; (2018) 265 FCR 290 at 296 [25], [27] (Allsop CJ, Moshinsky and Colvin JJ). Judgments, orders and awards by consent are as efficacious as those pronounced after a contest in creating cause of action estoppels and merging the causes of action sued on: Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (3rd ed, Butterworths, 1996) at p 21 [38].

35    The second essential element of res judicata is that the right or obligation adjudicated upon in the earlier proceeding be identical with that propounded in the later one. It is that right or obligation that ceases to have a separate existence.

36    As the Full Court of this Court held in Zetta Jet at 294 [18] (Allsop CJ, Moshinsky and Colvin JJ), following the reasoning of the plurality in Tomlinson at 517 [22] (French CJ, Bell, Gageler and Keane JJ), res judicata applies solely by reason of the character of the exercise of judicial power in pronouncing a final judgment. A cause of action thereupon merges in the judgment: Western Australia v Fazeldean (No 2) [2013] FCAFC 58; (2013) 211 FCR 150 at [25] (Allsop CJ, Marshall and Mansfield JJ). On that approach, the entry of final judgement on the cause of action claimed is what gives rise to res judicata: Zetta Jet at 296 [24]–[25] (Allsop CJ, Moshinsky and Colvin JJ). The relevant question is to inquire into what cause of action was adjudicated by the final judgment. For that reason, in determining the extent of the res judicata that arises in a particular case, the court looks only at the record (the nature of the claim and the final orders): Fernando v Commonwealth [2014] FCAFC 181; (2014) 231 FCR 251 at 261 [45] (Besanko and Robertson JJ); Pollnow v Armstrong [2000] NSWCA 245; Willoughby v Clayton Utz (No 2) [2009] WASCA 29; (2009) 40 WAR 98 at 107 [27]–[28] (Pullin JA); Zetta Jet at 297–8 [35].

37    It is therefore necessary to identify with some precision the cause of action on the basis of which the applicant sought relief in the Federal Circuit Court.

38    The basis for the applicant’s claim in the Federal Circuit Court was breach of contract. By his written submissions filed in the Federal Circuit Court, the applicant relied upon any applicable awards as a basis for implying a term into his employment contract requiring the payment of superannuation (which, as the respondent observed, was a submission that was difficult to reconcile with High Court authority such as Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410). The applicant did not claim relief based upon a breach of the Award itself. The applicant did not claim relief based on a failure to pay superannuation by a specified time. Rather, the claim made was based on a failure to pay superannuation at all.

39    In so far as the failure to pay superannuation was concerned the applicant also claimed a breach by the respondent of s 323(1)(a) of the Fair Work Act. That section provides:

An employer must pay an employee amounts payable to the employee in relation to the performance of work:

(a)    in full (except as provided by s 324); and

(b)    in money by one, or a combination of the methods referred to in subsection (2); and

(c)    at least monthly.

40    Note 2 to s 323(1) is in the following terms:

Amounts referred to in this subsection include the following if they become payable during a relevant period:

(a)    incentive-based payments and bonuses;

(b)    loadings;

(c)    monetary allowances;

(d)    overtime or penalty rates;

(e)    leave payments.

41    By its terms, s 323 does not extend to an obligation by an employer to make superannuation contributions to a superannuation fund for the benefit of an employee. Such payments are not “amounts payable to the employee”. This is consistent with the terms of Note 2 which makes no reference to superannuation contributions.

42    The applicant’s application to the Federal Circuit Court was not based on a cause of action for breach of an award or a breach of s 45 of the Fair Work Act (which prohibits a person from contravening a term of a modern award).

43    The statement of claim in the Federal Circuit Court disclosed no claim related to superannuation based on a breach of an award but a claim based in contract. This Court is not satisfied that there is no reasonable prospect of the applicant prosecuting its claims in this Court by reason of the doctrine of res judicata.

Cause of action or claim estoppel

44    Independently of the doctrine of merger underpinning res judicata is the rule that if a judgment finally resolves a conflict about the existence of a “cause of action”, parties to that proceeding will be precluded from asserting a right or obligation finally determined by an order of a court. A more accurate description than “cause of action” in this context is “claim” estoppel: Clayton v Bant [2020] HCA 44; (2020) 272 CLR 1 at 11–12 [28] (Kiefel CJ, Bell and Gageler JJ). It is not open to a party who has sought one remedy on a cause of action in earlier proceedings to re-litigate on the same cause of action or claim: Blair v Curran (1939) 62 CLR 464 at 531–2 (Dixon J); Jackson v Goldsmith (1950) 81 CLR 446 at 466–8 (Fullagar J); Port of Melbourne Authority v Anshun (1981) 147 CLR 589 at 597 (Gibbs CJ, Mason and Aickin JJ); Chamberlain at 507–8 (Deane, Toohey and Gaudron JJ). As the High Court held in Clayton at 13–4 [34] (Kiefel CJ, Bell and Gageler JJ):

The doctrine looks not for absolute identity between the sources and incidents of rights asserted … in consecutive proceedings. The doctrine looks rather for substantial correspondence between those rights. Enough for its operation is that the rights are of a substantially equivalent nature and cover substantially the same subject matter.

45    The respondent contends that in considering whether a “cause of action” is the same, it is necessary to focus on the substance of the two proceedings as distinct from their form, relying upon the decision of Gummow J in Trawl Industries of Australia Pty Ltd v Effem Foods Pty Ltd (1992) 36 FCR 406. It claims that the one factual matrix (in particular, the failure to pay superannuation) has generated the controversy which is given legal form in the two pleadings.

46    The plurality in Clayton at 13–4 [34] emphasised that it is necessary to look to the actual rights asserted in the consecutive proceedings to determine if they are substantially equivalent (Kiefel CJ, Bell and Gageler JJ):

A common law right to damages for negligent misstatement has been held to correspond to a statutory right to damages for misleading and deceptive conduct, for example, whereas a common law right to damages for personal injury has been held not to correspond to a common law right to damages for property damage arising from the same negligent conduct given that damage is a necessary element of a cause of action in negligence.

(Footnotes omitted.)

47    Here, neither the relief sought (damages for loss of opportunity) nor the cause of action pleaded (breach of the Fair Work Act s 35) is the same. As explained above, the claim in the Federal Circuit Court was based on a failure to pay superannuation at all in breach of a contractual term to pay superannuation. The claim in the Federal Circuit Court was not directed to the time by which superannuation contributions were required to be paid, unlike the claim in this Court. This is not simply a case where the applicant is claiming a different head of loss or different amount of loss based on the same legal right. This Court is not satisfied that the applicant does not have a reasonable prospect of success by reason of the doctrine of cause of action/claim estoppel.

Issue estoppel

48    The plurality in Tomlinson at 517 [22] identified the function and effect of issue estoppel (French CJ, Bell, Gageler and Keane JJ):

Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a “judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies”.

(Footnotes omitted.)

49    The Full Court of this Court in Zetta Jet at 295 [20] held that (Allsop CJ, Moshinsky and Colvin JJ):

an issue of fact or law is not “necessarily resolved” unless there has been a decision on the merits. For that reason, it may be said that there needs to be a decision “on the merits” in the sense of [being judicially assessed or evaluated by a determination that involves finding the facts and applying the law to those facts to reach a conclusion] in order for there to be an issue estoppel: Kuligowski v Metrobus [2004] HCA 34; 220 CLR 363 at 375 [25].

50    Another Full Court of this Court in Robinson v Deep Investments Pty Ltd [2018] FCAFC 232 at [137] suggested that issue estoppel may arise where a consent judgment has been given, where they stated (Perram, Jagot and Colvin JJ):

There are analogies with the cases concerned with the extent to which a consent judgment may give rise to an issue estoppel. In such cases, there must be an inquiry as to the issues that were determined by the consent judgment and any issue estoppel only arises to the extent that the consent determined a particular issue: Chamberlain v Deputy Commissioner of Taxation (ACT) (1988) 164 CLR 502 at 508; Commissioner of Taxation v Day [2007] FCAFC 193; (2007) 164 FCR 250 at [15]–[19] and Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2001] FCA 1861; (2001) 119 FCR 1 at [1148]–[1154]. The reason why it is necessary to identify with some care the issues determined by a consent judgment because it is the prospect of conflicting determinations of the same issue that provides the justification for the estoppel.

51    The fact that there are apparently conflicting authorities on this issue means it cannot be said that the applicant has no reasonable prospect of succeeding by reason of issue estoppel. At the very least, the fact that judgment has been obtained by consent makes it difficult to determine with precision the issues of fact and law determined by the Federal Circuit Court. In the present case, this is further complicated by the fact that the respondent conceded it had an obligation to make superannuation contributions and, by the time of the Federal Circuit Court order, had in fact made superannuation contributions in the sum claimed. It is far from clear that the issue of the time by which those superannuation contributions ought to have been made was a live issue between the parties which was required to be resolved by the Federal Circuit Court order or that the Federal Circuit Court order had any necessary implication for the timing by which superannuation contributions ought to have been made.

52    The Court is not satisfied that the applicant does not have a reasonable prospect of successfully prosecuting his claim based on issue estoppel.

Anshun estoppel

53    Anshun estoppel will preclude the assertion of a claim or of an issue of law or fact if the claim or issue was so connected to the subject matter of the first proceeding as to make it unreasonable, in the context of the first proceeding, for the claim or issue not to have been made or raised in it: Timbercorp Finance Pty Ltd (in liq) v Collins [2016] HCA 44; (2016) 259 CLR 212 at 229 [27] (French CJ, Kiefel, Keane and Nettle JJ); Tomlinson at 517–8 [22] (French CJ, Bell, Gageler and Keane JJ); Hoysted.

54    Anshun estoppel is not based on degrees of similarity between the matters raised in the two proceedings, but rather on unreasonableness having regard to the relevance of the matter to the subject matter of the first proceeding: Timbercorp at 236–7 [56] (French CJ, Kiefel, Keane and Nettle JJ).

55    It is necessary to have regard to the nature of claim made in the first proceeding and its subject matter. It is not sufficient to show that the claim could have been raised in the first proceeding. Anshun estoppel requires that it be shown that it was unreasonable having regard to the circumstances for the applicant to have refrained from asserting that right in those proceedings: Clayton at 12 [29] (Kiefel CJ, Bell and Gageler JJ). As was acknowledged in Anshun at 603 (Gibbs CJ, Mason and Aickin JJ), there may be a variety of circumstances which may justify a party refraining, reasonably, from litigating an issue in the earlier proceeding. Examples were given in that case (at 603) of “expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few”. However, omission from an earlier proceeding of a claim due to negligence, inadvertence or accident will not prevent an Anshun estoppel from arising: Anshun at 598 (Gibbs CJ, Mason and Aickin JJ). Nor will deficiency in legal advice: Donnelly v Kempsey Local Aboriginal Land Council [2020] NSWSC 1548 at [98] (Williams J); Sheehy v Nuix Pty Ltd [2023] FCA 56 at [148] (Halley J).

56    The applicant submitted that it was not unreasonable for him not to have pleaded a “lost opportunity claim” in the Federal Circuit Court proceedings for four reasons:

(1)    he did not know he had lost the opportunity;

(2)    he would have suffered disadvantage by pleading his current claim in those proceedings because the likelihood of his receipt of an insurance payout has become clearer over time as the extent of his illness has become apparent;

(3)    the pleading of a lost opportunity claim can reasonably be assumed to have involved additional expense; and

(4)    when compared to the claims he made in the Federal Circuit Court proceedings, the current claims could reasonably be regarded as relatively unimportant at that time.

57    The respondent contends that the test for reasonableness is an objective one. A reasonable person in the applicant’s position would have made a claim on his insurance on or about 25 April 2017 (when the applicant first became eligible to make a claim), would have discovered at that time that they had lost their insurance and would have been in a position to make a lost opportunity claim. The respondent contended that a reasonable person in the applicant’s position would have known they had had insurance cover because they would have received statements from AustralianSuper disclosing they had such insurance.

58    In evidence was an undated letter addressed to the applicant from AustralianSuper attaching a statement of his super balance as at 30 June 2016. The statement disclosed a deduction for insurance fees and a note under the closing balance stating “[y]ou don’t have insurance — see the ‘Your insurance’ section for more information”. The “Your insurance” section stated:

At 30 June 2016, you don’t have any insurance cover with us. So if you die or are totally and permanently disabled, the total payable will be your account balance of $6,081.12.

We offer Death, Total and Permanent Disablement, and Income Protection insurance at competitive prices to our members. We use our size and scale to negotiate the best rates we can for members. For most members it’s still better value than buying directly from an insurer. And, you pay for the cost of your insurance through your super, not your take home pay.

Depending on your age and the division you are in, if your insurance cover stops and then starts again, the type of cover you have, and the amount and cost, may differ from your previous cover. To see how this affects you, see the Insurance Guide at australiansuper.com/InsuranceGuide or call us for a copy.

59    It is observed that the disclosure in the super balance statement does not extend to why there was no insurance cover. The circumstances in which insurance cover stopped was explained in the Insurance Guide.

60    The respondent contends that the applicant’s claimed disadvantage should not be accepted. Damage is not an element of a cause of action based on s 45 of the Fair Work Act. The facts giving rise to the breach of s 45 had crystallised by the time the proceedings in the Federal Circuit Court had commenced.

61    The respondent contends that there was no evidence that the applicant would have incurred material additional cost in pleading the lost opportunity claim, it appeared that his lawyers were acting on a “no-win no-fee” basis and there is no evidence that any additional cost would have been beyond his means.

62    The respondent also contends that, given the size of the claim in the present proceedings (of at least $112,000), it is hard to see why the claim would have been regarded as unimportant.

63    The respondent has the onus of satisfying the Court that the applicant’s case has no reasonable prospect of success and has the onus of proving the unreasonableness in all the circumstances of the choice made by the applicant to refrain from asserting the rights he now seeks to assert. Based on the limited evidence before it, the Court is unable to make a positive finding that a failure to bring a claim in earlier proceedings was unreasonable. It appears to the Court that it would be necessary to assess all the facts that could reasonably be known to a person in the applicant’s position, including how a reasonable person suffering the applicant’s illness at the time the Federal Circuit Court proceedings were on foot, could reasonably be expected to have acted — and how reasonable legal advisors could reasonably be expected to have advised — based on the information that was available to the applicant. This seems a matter to be addressed at trial.

64    Based on the material before it, the Court is not satisfied that the applicant has no reasonable prospect of prosecuting his claim by reason of Anshun estoppel.

Abuse of process and deed of release

65    As the High Court said in Tomlinson at 518 [24] (French CJ, Bell, Gageler and Keane JJ), the doctrine of abuse of process is informed in part by similar considerations of finality and fairness as those which underpin the doctrines of estoppel discussed above. The High Court went on to explain at 518–9 [24]–[26]:

24    … Applied to the assertion of rights or obligations, or to the raising of issues in successive proceedings, [the doctrine of abuse of process] overlaps with the doctrine of estoppel. Thus, the assertion of a right or obligation, or the raising of an issue of fact or law, in a subsequent proceeding can be simultaneously: (1) the subject of an estoppel which has resulted from a final judgment in an earlier proceeding; and (2) conduct which constitutes an abuse of process in the subsequent proceeding.

25    Abuse of process, which may be invoked in areas in which estoppels also apply, is inherently broader and more flexible than estoppel. Although insusceptible of a formulation which comprises closed categories, abuse of process is capable of application in any circumstances in which the use of a court’s procedures would be unjustifiably oppressive to a party or would bring the administration of justice into disrepute. It can for that reason be available to relieve against injustice to a party or impairment to the system of administration of justice which might otherwise be occasioned in circumstances where a party to a subsequent proceeding is not bound by an estoppel.

26    Accordingly, it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel.

(Footnotes omitted.)

66    In addition to the matters relied upon to support the estoppel claims, the respondent also relied upon the terms of the deed of release in the context of the submissions made in reliance on the doctrine of abuse of process.

67    The respondent contended that it was “unthinkable” that the parties would agree that the applicant would be entitled to a settlement sum of $65,000 yet still be entitled to bring the same claim relating to superannuation, or slightly different claims, afresh.

68    The following observations are made in relation to the deed of release.

69    First, it is not clear what the exclusion for claims “relating to the … Superannuation Guarantee (Administration) Act 1992” was intended to cover. That Act does not impose any obligation on employers to pay superannuation and confers no right on an employee to the payment of superannuation by an employer. As the High Court said in Roy Morgan Research Pty Ltd v Commissioner of Taxation [2011] HCA 35; (2011) 244 CLR 97 at [3] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ):

Broadly speaking, the effect of the legislation under challenge is that if, as specified in the [Superannuation Guarantee (Administration) Act 1992 (Cth)], an employer fails to provide to all employees a prescribed minimum level of superannuation then any shortfall represented by failure to meet that minimum level in full, becomes the [superannuation guarantee charge (Charge)]. This impost is levied on the employer by the [Superannuation Guarantee Charge Act 1992 (Cth)]. The amount of the Charge is a debt due to the Commonwealth and payable to the respondent, the Commissioner of Taxation: Taxation Administration Act 1953 (Cth), Sched 1, s 255-5. The Charge includes a component for interest and an administration cost. The result is to supply an incentive to employers to make contributions to superannuation for their employees without incurring a liability to the Commissioner for the Charge.

70    To the extent that the release was excluding any rights the Commissioner of Taxation had against the employer, that was not a matter that could have been covered by the deed of release in the first place. Furthermore, by the time the deed of release had been executed, the respondent had made the superannuation contribution amounts sought by the applicant. Given the nature of the case as pleaded in the Federal Circuit Court, it is not clear what rights the applicant was seeking to retain which related to the Superannuation Guarantee (Administration) Act 1992 (Cth). It seems to the Court that the exclusion relating to the Act does not assist either party in the present proceedings.

71    Secondly, the applicant contends that the wide words of the deed of release must be read down relying upon the equitable principle that a release imports a knowledge in the releasor of what he releases: Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 at 129 (Dixon CJ, Fullagar, Kitto and Taylor JJ). The respondent relies upon the exception to that principle “unless upon a particular and solemn composition for peace persons expressly agree to release uncertain demands: Grant at 129 (Dixon CJ, Fullagar, Kitto and Taylor JJ). It was contended by the respondent that the deed of release was entered into in circumstances where the relationship between the parties had come to an end and should be construed as bringing to an end all claims relating to that relationship.

72    As the plurality said in Grant at 129–30 (Dixon CJ, Fullagar, Kitto and Taylor JJ):

From the authorities which have already been cited it will be seen that equity proceeded upon the principle that a releasee must not use the general words of a release as a means of escaping the fulfilment of obligations falling outside the true purpose of the transaction as ascertained from the nature of the instrument and the surrounding circumstances including the state of knowledge of the respective parties concerning the existence, character and extent of the liability in question and the actual intention of the releasor.

73    The terms of the deed of release ought to be construed in the context of the recitals and the terms of the deed as a whole. The recitals specifically refer to the Federal Circuit Court proceedings and the claims made in those proceedings. The amount paid under the deed was said to be on account of penalties. The only penalty that could be payable was for breach of the Fair Work Act claimed in those proceedings. As explained above, it is difficult to understand how the breach of that Act pleaded in the Federal Circuit Court proceedings could relate to superannuation.

74    The only evidence before the Court on this application of the intention of the applicant was a hearsay affidavit of his legal representative testifying that the applicant had said that he had no intention to release a claim for loss of opportunity based on the late payment of superannuation and that, at the time of executing the release, he was not aware he had such a claim. The state of the applicant’s knowledge and intention would need to be tested at trial.

75    Thirdly, the Court raised with the parties the issue of whether the deed of release was capable of effecting a release of a claim based on a breach of an award given force by the Fair Work Act in light of the principles set out by the Full Court in Wardman v Macquarie Bank Ltd [2023] FCAFC 13 at [215] (Wheelahan J, Bromberg J agreeing at [3], Snaden J agreeing at [287]). The extent to which the principles in Wardman are applicable in the present case is a matter that would need to be resolved at trial.

76    The issue of abuse of process in the present case appears to the Court to turn at least in part on the reasonableness of the applicant’s conduct in not raising in the Federal Circuit Court proceedings the issue of late payment of superannuation and its effect on his opportunity to make an insurance claim. In the present case, the Court is not satisfied that the applicant has no reasonable prospect of prosecuting his claim by reason of the doctrine of abuse of process.

Conclusion

77    For the above reasons, the application for summary judgment is to be dismissed. Beyond a conclusion that it cannot be said that the applicant has no reasonable prospect of successfully prosecuting his claim by reason of the doctrines and principles relied upon by the respondent, nothing in these reasons should be taken to be an expression of a conclusion that the applicant will be successful in prosecuting his claim at trial.

Associate:

Dated:    22 June 2023